Del Monte to raise P94M from follow-on offering

MANILA, Philippines – At 25% lower than its maximum offer price of P22.84 ($0.51*), fruit grower and canner Del Monte Pacific Ltd (DMPL) has set its final offer price per share at P17 ($0.38) for its follow-on offering.

At that set price, Del Monte is expected to raise as much as P93.5 million ($2.09 million) from the sale of 5.5 million common shares.

Proceeds from the fund raising activity will be used for the partial repayment of short-term existing debts related to the acquisition of Del Monte Foods Inc (DMFI). The acquisition was financed through debt worth $970 million and equity of $705 million in bridge loans, and $75 million in equity.

However, the final offer price is discounted at approximately 1.85% to the stock’s closing price of ₱17.32 ($0.39) on October 14 at the Philippine Stock Exchange (PSE).

Offer period will be from October 16 to 20 and the shares will be listed on October 30.

BPI Capital Corporation is the sole underwriter for the offering.

The market capitalization of DMPL post-offer amounts to up to P29.76 billion ($664 million).

Del Monte said the fund raising activities will reduce the group’s borrowings by approximately $520 million. This will significantly deleverage the company’s balance sheet as it pays down its short-term bridge financing.

The bridge loans will be refinanced through share sale, rights offer, and medium-term loan.

DMFI owns the Del Monte brand rights in the United States and South America.

Del Monte also owns the Del Monte brand for processed products in the Philippines, where it has the market lead for canned pineapple juice and juice drinks, canned pineapple and tropical mixed fruits, tomato sauce, spaghetti sauce, and tomato ketchup.

The company’s subsidiary, Del Monte Philippines, owns a 23,000-hectare pineapple plantation in Bukidnon in Mindanao. It is the world’s largest, fully-integrated pineapple operation. It also has 700,000-ton capacity processing facility. – Rappler.com

 *$1 = P44.82